Diwali Technical Picks: 2 Tata, 2 Defence, And 4 Other Stocks Are Prabhudas Lilladher's Top Bets

With Diwali festival just around the corner, market investors will be looking for attractive stocks to build their portfolios. For the medium-term to longer-term time frame, as per Prabhudas Lilladher, the overall bias is positive for Indian markets with much upside potential visible and one can pick for the quality stocks expecting good returns.

Accordingly, PL has come out with select quality stocks as Diwali Picks which on technical parameters are well placed indicating strength and looks promising to yield good returns in the next one-year time frame.

"Diwali, the Festival of Lights & Financial Enlightenment is the best time to pick up some high yielding stocks and start our financial investment with a positive note. We suggest to buy and accumulate the recommended stocks
at every decline maintaining the levels as mentioned in the report," PL's technical note said.

PL has recommended buying in two Tata and two defence stocks. The brokerage also selected four other stocks majorly from automobile, batteries, depositories and chemicals business. Here are the key 8 stocks that PL recommends for Diwali:

1. Tata Power:

The stock has witnessed a decent rally in the last 5-6 months indicating a clear triangular breakout on the weekly chart thereafter strengthening the trend and recently with a short correction with 50% retracement of the recent rally has shown signs of taking support near the confluence of 50EMA and 100 period MA zone of 228-230 levels to make the chart look attractive.

There are signs of improvement in the bias with the RSI also indicating a trend reversal after the short slide to signal a buy. There is much upside potential from current levels and can anticipate for further rise in the coming months.

PL suggests to buy and accumulate the stock for an upside potential target of 290 - 320 keeping the stop loss of 210.

2. Tata Motors:

The weekly chart has indicated a strong bull run for the stock in the last 2-3 years and after every consolidation phase, has indicated a strong upward move to scale new heights. Recently after the decent rally, it has been consolidating for quite some time maintaining above the significant 50EMA zone, on the daily chart, with near term support intact near 590 levels.

Also, the stock has sustained above the important 100 period MA to indicate strength and can anticipate for further upward move. Again, on the weekly chart, maintaining the support near 550 zone of the important 50EMA level, once a decisive move past the 677 zone is established, shall trigger for fresh breakout anticipating for further targets of 750 and 820 levels for the medium-term time frame.

PL suggests to buy and accumulate for upside potential target of 780-820 levels keeping the stop loss of 550.

3. Larsen & Toubro:

The stock on the weekly chart, has given a strong bull run in the last one year and recently witnessed some profit booking from the peak zone of 3120 level and has slipped to some extent to take a breather. On the daily chart, it has shown signs of taking support near the significant 50EMA level of 2890 zone with some consolidation seen and indicating a pullback to improve the bias.

With the RSI also showing a trend reversal has signaled a buy with immense upside potential visible from current levels.

PL suggests to buy and accumulate the stock for an upside target of 3500- 4350 levels keeping the stop loss of 2700.

4. BHEL:

The stock has made an all-time high of 148 levels and thereafter with some correction has witnessed a decent erosion from 133 zone and currently has arrived at the long term trendline support zone of 113 levels where it has shown signs of bottoming out and improving the bias. On the weekly chart, the bias has been maintained strong and with a slight correction witnessed, again has seen a pullback to improve the bias with trend maintained intact and further rise is anticipated in the coming days.

The RSI has indicated flattening out after the slide and with a trend reversal indicated has much upside potential to carry on the momentum further ahead.

With the chart looking attractive, PL suggests to buy and accumulate the stock for an upside potential target of 160-190 keeping the stop loss of 107 for the medium-term time frame investment purpose.

5. CDSL:

The stock, on the weekly chart, has overall turned the trend positive after the downward slide and very much strengthen the bias moving past the significant 100 period MA and indicating a breakout above the resistance barrier of 1430 zone to anticipate for further rise.

With the RSI also is well placed showing strength , there is much upside potential visible from current levels, PL said, "we anticipate a further upward rise in the coming days." Adding, it said, "With the chart looking attractive, we suggest buying and accumulating this stock for upside targets of 1850 -2100 keeping the stop loss of 1300."

6. Exide Industries:

The stock on the weekly chart has indicated a strong uptrend since the last 5 months and recently with a short correction from the peak zone of 273 has cooled off to show signs of bottoming out near 240 levels. Almost a retracement of 38.20% is completed of the recent rally and with indication of improvement visible in the weekly chart, one can anticipate for further rise in the coming months.

The RSI also has cooled off from the highly overbought zone and is well placed at an attractive level for another strong upward move. With the chart looking good, PL suggests to buy and accumulate the stock for an upside target of 300-340 levels keeping the stop loss of 225.

7. SRF:

The stock has maintained the long term trendline support zone near 2000 levels on the weekly chart and currently has shown improvement in the bias with pullback witnessed and anticipated to carry on the positive move further ahead. A decisive move past 2350 zone of the cluster of moving averages of 50EMA and 100 period MA on the weekly chart shall further strengthen the trend and can expect for strong upward move in the coming months.

With the RSI also well placed and indicating a trend reversal to signal a buy, PL suggests to buy and accumulate the stock for an upside potential target of 2600-2950 keeping the stop loss near 2000 levels.

8. Ashok Leyland:

The stock has overall maintained a strong trend on the weekly chart with a short erosion witnessed from the peak zone of 191 levels and has almost retraced 50% of the recent rally with support zone lying at 160 levels of the significant 50EMA zone. The RSI also has gradually cooled off from the overbought zone and is currently well placed to anticipate for consolidation and further improvement in the bias.

With the chart looking good, PL suggests to buy the stock for an upside potential target of 210-255 levels keeping the stop loss at 147.

For Nifty 50, technically, PL believes that the major support zone lies near 18850 levels and 18600 zone of the significant 200 period MA where one can expect for some consolidation and if a decisive breach below is triggered then the overall scenario can turn very much bearish. So as of now, for the overall bias to improve, it would need a decisive move past the 19200-19250 zone to establish some conviction and anticipate for further rise in the coming days.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.